New Delhi, Aug 28 IBNS | 2 years ago

Gold prices touched record high figure of Rs. 34,500 per 10 grams on Wednesday.

The price of silver stood at Rs 59,000 per kg.

The rupee fell to an all time low of Rs 68 per dollar on Wednesday and shares slumped as the carnage of the Indian currency continued and foreign investors continued to sell out.

Breaching the 68-mark in morning trade, rupee slumped to 68.70 against the dollar, which is about 246 paise lower than the previous close, all triggering the fear psychosis of foreign selling.

According to media reports, foreign investors sold Indian shares worth about USD 1 billion in the eight sessions through Tuesday.

Earlier on Tuesday, the rupee had breached the 66 mark to touch 66.24 against the dollar even as Finance Minister P Chidambaram assured that India is on the path of fiscal consolidation.

The rupee, which is partially convertible, traded at lowest.

As the rupee continued its free fall, the share markets also tumbled. BSE Sensex was down 2.67 percent on Wednesday. Nifty also slumped over 3 percent.

While the rupee fell, on Tuesday Union Finance Minister P Chidambaram in Parliament said India is on the path of fiscal consolidation as more dollars are spent than earned.

"Challenges will be there but we must have the courage and clear headedness to fight these challenges. And with your help, we'll overcome these challenges," he said.

He said in Rajya Sabha answering questions from Opposition: "At the moment, we believe the value of the rupee has overshot its true value. We can correct it only by taking medium and long term measures. I cannot say whether the rupee will appreciate... nobody can say that."

"It appreciated in Feb 2013. It came under pressure in May 2013. Rupee will find its level. Our inflation is high, current account deficit has caused concern among investors and analysts, we have to still communicate and once confident increased, true value will get reflected," he said.

He said "we allowed the fiscal deficit to breach and CAD [Current Account Deficit] to swell because of the certain decisions between 2009-2011 after the collapse of the US economy in 2008."

He said the Cabinet Committee on Investment (CCI) has cleared 18 power projects worth Rs 83,772 crore.

(Posted on 28-08-2013)